Oil prices snapped their six day winning streak this amid renewed fears of a supply glut after OPEC countries reported a growth in their output.
The losses were, however, capped by the Turmoil in Middle East and signs that US production was leveling off with the Brent oil on course to record its biggest weekly gain in 5 years.
There are however fears that the six day rally in crude prices came on a false premise of falling crude production with data suggesting that producers are not shutting down rigs at a fast pace as they once were and that several oil producers around the world are still trying to put more oil into the market.
“There’s not necessarily a lot of belief in the front of the market,” Ric Navy, senior vice president for energy futures at brokerage R.J. O’Brien & Associates LLC, told the Wall Street Journal.
“We’re still over supplied.”
Light sweet crude for May delivery ended down 97 cents or 1.7% to $55.71 a barrel on the New York Mercantile Exchange. The US benchmark, despite retreating from 2015 highs recorded during the week, still turned 7.9% positive for the week.
This is the biggest weekly jump by the contract since it advanced 13.5% in the week ending on February 25 2011.
Brent futures, the global benchmark settled down 59 cents or 0.8% to $63.45 a barrel on the London-based ICE Futures Exchange.
The contract still recorded a 9.6% weekly advance-the biggest in more than 5 years- buoyed by reports of falling US output and Middle East conflict reports.
“Futures markets are always forward-looking and as a result, the market has seen a focus shift away from rising stock levels … and toward production leveling where significant uncertainties lie ahead,” Jim Ritterbusch, president of Ritterbusch & Associates, told Reuters.
“Technically, Brent is looking in better shape at the moment,” he said.
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